Private Empire, Steve Coll, Allen Lane, Pp 685, £ 25
NO words are minced, by the two-time Pulitzer award-winner and former editor of the Washington Post and a story writer, in narrating the story of America’s biggest oil company ExxonMobil, which has 80 thousand employees in nearly 200 countries across the globe. The book talks of big oil, big money, big government, narrating how ExxonMobil – the energy giant that recently displaced Walmart atop the Fortune 500 list, with more than 450 billion dollars in revenue – operates in failed States, keeps the oil flowing when no one else can and how it handles hapless bureaucrats charged with regulating it, scientists challenging it, rival companies trying to outsmart it and activists bent on changing it. It is also the story of one idiosyncratic man – Lee ‘Iron Ass’ Raymond, who served as chief executive of the company from 1993 to 2005.
Coll starts with the low point of Exxon partly because Exxon had to reinvent itself following the spillage off Alaska’s coast becoming one of the world’s most rigorously managed and profitable companies. Coll explores fully how this most disciplined company has tackled the challenges facing a modern oil corporation – such as the difficulty of replenishing reserves in a climate of “resource nationalism”, the ethical dilemma of collaborating with authoritarian regimes; growing public scrutiny of corporate wrong doings; and above all, concern about the environmental damage caused by the use of fossil fuels.
ExxonMobil comes across as a particularly cynical big business, especially in its relationship with the United States government – either manipulating or ignoring politicians depending on its needs. It has its own armies and in these days of outsourcing, also hires those of others. In Chad, its 2,500 security men patrol the countryside in radio-equipped SUV’s, watching for guerrillas as the company set up an intelligence operation bigger and better than the local CIA set up. In the war-racked Niger delta, it gave boats to the Nigerian Navy, deployed its own vessels at sea to scout for pirates and “recruited, paid, supplied and managed sections of the Nigerian military and police.” On their uniforms, the Nigerian police sported Mobil’s familiar red flying horse. In Aceh, Indonesia, Mobil paid the salaries of Indonesian counter-insurgency forces who tortured prisoners on company property. Payment kept flowing in, even after the American government cut off aid to the Indonesian military because of such abuses.
The Global Climate Coalition it formed was described by a Greenpeace director as “the most effective independent association I’ve ever seen at working to block progress on climate change.” Warned by the Obama administration that striking independent oil deals with the Kurds in Iraq would exacerbate ethnic tension in the country, ExxoMobile went ahead anyway. “I had to do what was best for my shareholders,” explained Rex Tillenson, the chief executive to follow Raymond.
The global marketplace was remade during these years. The Soviet collapse had unleashed a wave of deregulation that opened markets to foreign investors. Asia, especially China and India, began a rapid ascent, fuelling a global economy that posted unprecedented growth and booming stock markets. A the same time, it gained heightened awareness about environmental damage caused by fossil fuels, while terrorism, wars and all kinds of domestic political upheavals have today become common.
The impact of the corporate was mixed. Most of these transformations boosted profits but the speed and complexity created volatile conditions for business and a company such as ExxonMobil is allergic to volatility.
“Exxon’s investments in a particular oil and gas field could be premised on production life span of forty or more years,” writes Steve Coll. “During that time, the United States might change its President and its foreign and energy policies at least half a dozen times.”
“We see governments come and go,” Raymond once remarked with considerable understatement and so can a powerful corporation wield enough influence to evade and manage global volatility and make it work on its behalf. In the case of ExxonMobil, it can and with great success. “The corporation’s lobbyists bent and shaped America’s foreign policy,” writes Coll, “as well as economic climate, chemical and environmental regulations.”
More than 400 interviews, thousands of pages of previously classified documents obtained under the Freedom of Information Act to glean, obscure court records and careful scouring of WikiLeaks documents provide the foundation for a fascinating story of how corporate power is exerted at the highest levels and across the globe. Coll travelled to Indonesia, Nigeria, Chad, Russia, Equatorial Guinea among the places, as well as ExxonMobil’s headquarters at Irving, Texas, but it is Washington, the city where the company’s influence is as pervasive as it is effective.
Coll shows the inner workings of one of the Western world’s most significant concentrations of undetected power and just how the power is wielded because oil companies play a critical role in the carbon economy to which we are so fatefully attached.
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